IDEAS home Printed from https://ideas.repec.org/p/zbw/glodps/195.html
   My bibliography  Save this paper

The Effects of Foreign Aid on Refugee Flows

Author

Listed:
  • Dreher, Axel
  • Fuchs, Andreas
  • Langlotz, Sarah

Abstract

This article is the first to systematically study whether foreign aid affects the net flows of refugees from recipient countries. Combining refugee data on 141 origin countries over the 1976-2013 period with bilateral Official Development Assistance data, we estimate the causal effects of a country’s aid receipts on both total refugee flows to the world and flows to donor countries. The interaction of donor-government fractionalization and a recipient country’s probability of receiving aid provides a powerful and excludable instrumental variable, when we control for country- and time-fixed effects that capture the levels of the interacted variables. Although our results suggest that exogenous aid induces recipient governments to encourage the return of their citizens, we find no evidence that aid reduces worldwide refugee outflows or flows to donor countries in the short term. However, we observe long-run effects after four three-year periods, which appear to be driven by lagged positive effects of aid on growth.

Suggested Citation

  • Dreher, Axel & Fuchs, Andreas & Langlotz, Sarah, 2018. "The Effects of Foreign Aid on Refugee Flows," GLO Discussion Paper Series 195, Global Labor Organization (GLO).
  • Handle: RePEc:zbw:glodps:195
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/176803/1/GLO-DP-0195.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. repec:spr:revint:v:12:y:2017:i:2:d:10.1007_s11558-017-9275-2 is not listed on IDEAS
    2. Brech, Viktor & Potrafke, Niklas, 2014. "Donor ideology and types of foreign aid," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 61-75.
    3. Eric Werker & Faisal Z. Ahmed & Charles Cohen, 2009. "How Is Foreign Aid Spent? Evidence from a Natural Experiment," American Economic Journal: Macroeconomics, American Economic Association, vol. 1(2), pages 225-244, July.
    4. TimothyJ. Hatton, 2009. "The Rise and Fall of Asylum: What Happened and Why?," Economic Journal, Royal Economic Society, vol. 119(535), pages 183-213, February.
    5. repec:now:journl:100.00014060 is not listed on IDEAS
    6. Timothy J. Hatton, 2016. "Refugees, Asylum Seekers, and Policy in OECD Countries," American Economic Review, American Economic Association, vol. 106(5), pages 441-445, May.
    7. Bluhm, Richard & Gassebner, Martin & Langlotz, Sarah & Schaudt, Paul, 2016. "Fueling conflict? : (De)escalation and bilateral aid," MERIT Working Papers 053, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Mathias Czaika & Amy Mayer, 2011. "Refugee Movements and Aid Responsiveness of Bilateral Donors," Journal of Development Studies, Taylor & Francis Journals, vol. 47(3), pages 455-474.
    9. Inmaculada Martínez-Zarzoso & Felicitas Nowak-Lehmann D. & Stephan Klasen & Mario Larch, 2009. "Does German Development Aid Promote German Exports?," German Economic Review, Verein für Socialpolitik, vol. 10, pages 317-338, August.
    10. Volkerink, Bjorn & De Haan, Jakob, 2001. "Fragmented Government Effects on Fiscal Policy: New Evidence," Public Choice, Springer, vol. 109(3-4), pages 221-242, December.
    11. Jesús Fernández-Huertas Moraga & Hillel Rapoport, 2015. "Tradable Refugee-admission Quotas and EU Asylum Policy," CESifo Economic Studies, CESifo, vol. 61(3-4), pages 638-672.
    12. Nicolas Van de Sijpe, 2013. "Is Foreign Aid Fungible? Evidence from the Education and Health Sectors," World Bank Economic Review, World Bank Group, vol. 27(2), pages 320-356.
    13. Timothy Besley & Torsten Persson, 2011. "Fragile States And Development Policy," Journal of the European Economic Association, European Economic Association, vol. 9(3), pages 371-398, June.
    14. Baez, Javier E., 2011. "Civil wars beyond their borders: The human capital and health consequences of hosting refugees," Journal of Development Economics, Elsevier, vol. 96(2), pages 391-408, November.
    15. Dreher, Axel & Gassebner, Martin & Schaudt, Paul, 2017. "The Effect of Migration on Terror - Made at Home or Imported from Abroad?," CEPR Discussion Papers 12062, C.E.P.R. Discussion Papers.
    16. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588.
    17. repec:wsi:wschap:9789814719902_0010 is not listed on IDEAS
    18. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
    19. Raghuram G. Rajan & Arvind Subramanian, 2008. "Aid and Growth: What Does the Cross-Country Evidence Really Show?," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 643-665, November.
    20. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
    21. Olivier Cadot & Ana Fernandes & Julien Gourdon & Aaditya Mattoo & Jaime Melo, 2014. "Evaluating Aid for Trade: A Survey of Recent Studies," The World Economy, Wiley Blackwell, vol. 37(4), pages 516-529, April.
    22. Jesús Fernández-Huertas Moraga & Hillel Rapoport, 2015. "Tradable Refugee-Admission Quotas, Matching and the New European Agenda for Migration," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(2), pages 50-56, 08.
    23. de Ree, Joppe & Nillesen, Eleonora, 2009. "Aiding violence or peace? The impact of foreign aid on the risk of civil conflict in sub-Saharan Africa," Journal of Development Economics, Elsevier, vol. 88(2), pages 301-313, March.
    24. Ahmed, Faisal Z., 2016. "Does Foreign Aid Harm Political Rights? Evidence from U.S. Aid," Quarterly Journal of Political Science, now publishers, vol. 11(2), pages 183-217, July.
    25. repec:oup:ecpoli:v:32:y:2017:i:91:p:447-496. is not listed on IDEAS
    26. Charles Cohen & Eric D. Werker, 2008. "The Political Economy of ``Natural'' Disasters," Journal of Conflict Resolution, Peace Science Society (International), vol. 52(6), pages 795-819, December.
    27. Axel Dreher & Vera Z Eichenauer & Kai Gehring, 2018. "Geopolitics, Aid, and Growth: The Impact of UN Security Council Membership on the Effectiveness of Aid," World Bank Economic Review, World Bank Group, vol. 32(2), pages 268-286.
    28. Semih Tumen, 2016. "The Economic Impact of Syrian Refugees on Host Countries: Quasi-experimental Evidence from Turkey," American Economic Review, American Economic Association, vol. 106(5), pages 456-460, May.
    29. repec:taf:ctwqxx:v:29:y:2008:i:7:p:1305-1322 is not listed on IDEAS
    30. repec:ces:ifodic:v:13:y:2015:i:2:p:19170023 is not listed on IDEAS
    31. Timothy J. Hatton, 2017. "Refugees and asylum seekers, the crisis in Europe and the future of policy," Economic Policy, CEPR;CES;MSH, vol. 32(91), pages 447-496.
    32. Schnakenberg, Keith E. & Fariss, Christopher J., 2014. "Dynamic Patterns of Human Rights Practices," Political Science Research and Methods, Cambridge University Press, vol. 2(01), pages 1-31, April.
    33. Jeffrey D. Sachs, 2016. "Toward an International Migration Regime," American Economic Review, American Economic Association, vol. 106(5), pages 451-455, May.
    34. Christian Dustman & Kristine Vasiljeva & Anna Piil Damm, 2016. "Refugee Migration and Electoral Outcomes," CReAM Discussion Paper Series 1619, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
    35. Yasser Moullan, 2013. "Can Foreign Health Assistance Reduce the Medical Brain Drain?," Journal of Development Studies, Taylor & Francis Journals, vol. 49(10), pages 1436-1452, October.
    36. Barthel, Fabian & Neumayer, Eric, 2015. "Spatial dependence in asylum migration," LSE Research Online Documents on Economics 64187, London School of Economics and Political Science, LSE Library.
    37. Helen V. Milner & Daniel L. Nielson & Michael G. Findley, 2016. "Citizen preferences and public goods: comparing preferences for foreign aid and government programs in Uganda," The Review of International Organizations, Springer, vol. 11(2), pages 219-245, June.
    38. Jesus Fernandez-Huertas Moraga & Hillel Rapoport, 2015. "Tradable Refugee-Admission Quotas, Matching and the New European Agenda for Migration," Post-Print hal-01304431, HAL.
    39. Axel Dreher & Steffen Lohmann, 2015. "Aid and growth at the regional level," Oxford Review of Economic Policy, Oxford University Press, vol. 31(3-4), pages 420-446.
    40. Sebastian Galiani & Stephen Knack & Lixin Colin Xu & Ben Zou, 2017. "The effect of aid on growth: evidence from a Quasi-experiment," Journal of Economic Growth, Springer, vol. 22(1), pages 1-33, March.
    41. Nils Petter Gleditsch & Peter Wallensteen & Mikael Eriksson & Margareta Sollenberg & Hã…Vard Strand, 2002. "Armed Conflict 1946-2001: A New Dataset," Journal of Peace Research, Peace Research Institute Oslo, vol. 39(5), pages 615-637, September.
    42. Ahmed, Faisal Z. & Werker, Eric D., 2015. "Aid and the Rise and Fall of Conflict in the Muslim World," Quarterly Journal of Political Science, now publishers, vol. 10(2), pages 155-186, June.
    43. repec:cup:apsrev:v:108:y:2014:i:02:p:297-318_00 is not listed on IDEAS
    44. Benjamin Crost & Joseph Felter & Patrick Johnston, 2014. "Aid under Fire: Development Projects and Civil Conflict," American Economic Review, American Economic Association, vol. 104(6), pages 1833-1856, June.
    45. repec:eee:deveco:v:130:y:2018:i:c:p:66-83 is not listed on IDEAS
    46. Francesc Ortega & Giovanni Peri, 2016. "Openness and income: The roles of trade and migration," World Scientific Book Chapters,in: The Economics of International Migration, chapter 10, pages 309-329 World Scientific Publishing Co. Pte. Ltd..
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    foreign aid; Official Development Assistance; migration; refugees; displaced people; humanitarian crises; repatriation policies;

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other
    • H84 - Public Economics - - Miscellaneous Issues - - - Disaster Aid
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:glodps:195. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics). General contact details of provider: http://edirc.repec.org/data/glaboea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.